Which of the Following Is a Shortcoming of GDP

question 48

Multiple Choice

Which of the following is a shortcoming of GDP?

• A) GDP measures nonmarket transactions.
• B) GDP includes an estimate of illegal transactions.
• C) GDP includes an estimate of the value of household services.
• D) None of the above are true.

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Definitions:

Industry Output

The total production of goods and services by all firms in a specific industry over a defined period.

Economic Profits

The excess of total revenues over total costs, including both explicit and implicit costs.

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to purchase at various prices.

Long-Run Profits

The amount of money a firm makes after all inputs have been adjusted to their optimal levels, considering the long-term outlook.